Financial Management and Strengthening Primary Health Care through CLAS in Peru

PODCAST en Español:  Gestión Financiera y Fortalecimiento del Primer Nivel de Atención de Salud con CLAS en Perú

Escuchar podcast en Español:    🎧 Youtube: https://youtu.be/_bYnMMPGmns Spotify:  https://open.spotify.com/episode/22Fg6b5r1Fo2zGbnXBLIPE?si=e6b1110a8a074e77   

Or, read podcast text translated to English with further publications on CLAS at end:

•    Hello.   I am Dr. Laura Altobelli, a researcher and professor of public health at Cayetano Heredia University and Representative in Peru of Future Generations, a nonprofit organization.  We have spent several years supporting regional governments on issues related to primary health care and community health.  In particular, we have supported a government program with strategies that have improved the quality of health services provided to more than 7 million Peruvians. This program is called CLAS, which stands for Local Community Health Administration.   In this podcast, I’ll discuss how CLAS-run primary care services differ from traditional primary care services, how they are organized, how they are funded, and their successes.  Above all, I will explain the risk of disappearing now faced by this excellent program.

•    I want to address this issue now because if measures are not taken very soon to restart the successful financial management model and strengthen the program, all the years of progress in providing quality health services to the country’s vulnerable populations—especially outside Lima—will be lost.  This is a critical moment for the new national and regional authorities, who will be elected in April 2026, to recognize the priority political and budgetary support they should give to primary health care and to the proven CLAS health co-management model.

To help you better understand this program, I can tell you about its implementation in the Las Moras Health Post in Huánuco:  

•          This was a small health post in a settlement on one of the steep hillsides with unpaved roads on the outskirts of the city of Huánuco.  It had a single room and was open for only a few hours a day.  When the Shared Management Program was launched in 1994 with the new community co-management model, the Las Moras Health Post was among the first to join.   Based on legal program norms, the head doctor of the health post and the Las Moras community formed a committee with elected community members and registered this committee as a non-profit civil association with the National Superintendency of the Public Registry (SUNARP).  This was called a CLAS Association.  They opened a joint bank account between the government and the CLAS committee and began receiving funds transferred from the government.  Thus, the CLAS Las Moras Health Center was able to hire health personnel, purchase medications and equipment, and improve its physical infrastructure. The CLAS committee participated in the development of a Local Health Plan and monitored the proper use of funds.     

•    Gradually, the CLAS Las Moras Health Post came to have more staff and more equipment; it expanded its physical facilities to include several rooms, then built a second floor, and later added two additional floors at the rear.   They set up a pharmacy stocked with medications and an equipped laboratory.   It succeeded in being reclassified as a Health Center.  This is how the CLAS program unfolded across all regions of the country.

•    I should mention that this community-participatory health strategy was the initiative of the former Minister of Health, Dr. Jaime Freundt.  Starting with a pilot program involving 16 health facilities in 1994,  the program rapidly expanded to more than 2,100 primary care facilities co-managed with CLAS nationwide (out of a total of 6,700 primary care facilities).

You might be asking, what exactly does the community do in the co-management of primary care?  

  • The CLAS Association oversees the management of the health facility, particularly how public funds are spent and how they are reported or accounted for to the state.  The CLAS helps health personnel to plan, implement, and monitor the Local Health Plan.  It helps manage personnel, procurement, infrastructure improvements, and payment for services, and also assists in planning and managing community health promotion activities, collaborating with community health workers.

How is a CLAS structured?

•    As a nonprofit civil association, the CLAS has three components: the General Assembly, the Board of Directors, and the Executive Director.

•    In a CLAS, the General Assembly includes elected representatives from all social organizations in the community that work on health or nutrition issues, such as the soup kitchen (Comedor Popular), the Glass of Milk (Vaso de Leche) committee, the Association of Community Health Workers (CHW), and others.  The CLAS General Assembly also has two elected representatives from each community or sector: a community leader and a CHW.  The Assembly also includes a representative from the regional government, the local government, the health network or micro-network, and health workers. 

•    The CLAS Board of Directors has a President, Secretary, Treasurer, and members, all elected by the community. 

•    The Executive Director of the CLAS is the head of the health facility. This person is called the CLAS Manager.

•    In addition to community participation in the management of the health facility, the co-management model has two other key components.

•    The most important component is the financial management model.  What does this entail? It means that the state transfers public funds to a bank account managed jointly by the State and the CLAS Association.  

•    CLAS funds come primarily from public sources, mostly from the Integrated Health Insurance (SIS) program and from Results-Based Budgets (PpRs).  In addition, CLAS can receive revenue from other public or private sources that supplement health sector funds, which are often insufficient to provide quality care.  

•    CLAS can also receive resources from local government: from their Foncomún account, from the Participatory Budget process, or from a potential future Municipal Incentive Plan.  CLAS also expand their resources from private sources, such as donations from international organizations or from individuals with other health insurance providers who pay to receive care at a CLAS facility because they recognize the high quality of care.   Private companies can contract with a CLAS to provide health services to their employees.

•    Note that accountability is very strict regarding transfers of public funds:  CLAS submit monthly expense reports and an annual balance sheet to their respective Regional Health Directorate, and undergo an independent audit each year.

•    Traditional health services, on the other hand, do not manage any funds for local expenses.  Their costs are managed solely by a Budget Executing Unit (Unidad Ejecutora) (which I will explain in a bit). 

•    Another key aspect of CLAS is the co-management of health personnel—the CLAS monitors the quality of care provided by health personnel and can hire support staff such as data entry clerks, ambulance drivers, security guards, maintenance workers, and cleaning staff, etc.

Is there EVIDENCE that CLAS works better than the traditional system?

•    There are several studies comparing the CLAS co-management system with the traditional system.  These studies show that CLAS-run services achieve better results in terms of the quality and coverage, equity of access, cost efficiency, and health outcomes, among other factors.  

•    For example, regarding  wait times, as an indicator of quality, it was found that in CLAS facilities, the vast majority of patients — 75%— wait less than 15 minutes to be seen.  In contrast, in the traditional health system, only a minority of patients wait less than 15 minutes to be seen. 

•    Regarding health care coverage for children, a study using data from the Comprehensive Health Insurance (SIS) covering 675 facilities in three regions showed that the average number of medical visits per year per child under 5 was 72% higher in CLAS facilities compared to traditional services, even though CLAS facilities had fewer doctors on average than traditional services in the same category.  

•    In light of the better results in CLAS compared to the traditional system,  a bill was drafted between 2003 and 2007 and passed in 2007 (Law 29124).  This is the Law Establishing Citizen Participation in Primary Care at Health Facilities of the Ministry of Health and the Regions.  The implementing regulations were approved the following year.

  • For the most part, the law worked well to provide stability to the CLAS centers, which remained operational and served the population very effectively in their respective areas.   However, pressure eventually began to mount against them.    

•         One source of pressure against the CLAS centers came from the Integrated Health Insurance (SIS) program, which is the main source of public funds for financing primary care.  With SIS funds, the CLAS paid for everything except the salaries of appointed staff.  It covered contracted staff, medications, equipment, supplies, and infrastructure.  The SIS always made direct transfers to the CLAS with the funds allocated to them based on the number of beneficiaries in their area.

•    But starting in 2016, the SIS began gradually cutting the funds it sent to the CLAS.   By 2022, for no justifiable reason, the SIS stopped making transfers to the CLAS.   The SIS funds allocated to the CLAS are now transferred in their entirety to the nearest Budget Executing Unit (Unidad Ejecutora-UE).

In reality, the main challenge for the entire primary care level is the management of its funding.

•    This has always been a serious problem for the traditional system because all its funds are managed by Budget Executing Units —which are located roughly at the provincial level in all regions of the country.  Now this is the same serious problem for the CLAS because funds are no longer transferred to the CLAS; instead, the Budget Executing Units receive and spend their financial resources.  

Why are the Budget Executing Units a serious problem? 

•    The Budget Executing Units are a serious problem for primary care because they apply traditional public administration laws.  Spending processes are very cumbersome and time-consuming.  Each individual purchase requires the preparation of a detailed technical dossier and a public tender with a minimum of three bidders.  Sometimes the process is declared void due to litigation by a bidder, and the process must be restarted from scratch.  Each purchase takes between three and eight months to complete, and only then is the purchase distributed to the health facilities.  A single Budget Executing Unit manages purchases and payments for up to 30 or more health facilities with an annual budget of hundreds of thousands of soles.  The Budget Executing Units cannot spend their entire budget on time; health facilities are left waiting a long time to receive the supplies and medications they need; sometimes they run out of items, and sometimes they purchase things that no one needs.  This makes it impossible to provide quality services.

•    Indeed, the CLAS financial management model was created to make spending more efficient and has been key to streamlining the management of primary care, due to its ability to spend funds locally with greater agility and speed.  As a result, it can provide quality services.   However, since 2022, when SIS ordered that public funds not be sent directly to the CLAS, and instead channeled funds only to the Budget Executing Units.

Since funds are no longer allocated directly to the CLAS but rather to Budget Executing Units, the CLAS have been left in the same situation as traditional services, which struggle to provide quality care.

•    To illustrate the current difficult situation facing the CLAS, I would like to remind you of the sad story from 2023 involving a Congressman of the Republic who was visiting with his family in the tourist area on the southern coast of Arequipa.  Suddenly, during the night, the congressman suffered a medical emergency, and his family took him to the nearest health center in the town of Punta de Bombón.  But the health center there was closed.  Unfortunately, there was no one there to attend to the emergency.  As a result, the congressman’s family continued in their car on the road to a distant hospital.   

•    The sad thing is that for many years prior, the CLAS Punta de Bombón Health Center was co-managed with its CLAS Association and provided very high-quality services.  It had medical staff on duty 24-hours a day, an ambulance with a driver, and was fully equipped; it had a high level categorization of resolutive capacity of I-4, the highest possible for primary care.  It was considered a “strategic facility for the primary level of care.”

•          However, on that tragic night in 2023 for the congressman—who likely died due to a lack of timely care, though this cannot be confirmed—the CLAS Punta de Bombón Health Center no longer had medical staff on duty at night; it operated only 12 hours a day. It had an ambulance but no longer had a driver, nor the maintenance or fuel needed for the ambulance. The CLAS Punta de Bombón Health Center had stopped receiving funds for local expenditure some time ago, without any justification.

•    Previously, this health center and many others nationwide within the CLAS system received transfers of public funds that allowed for high-quality care.   Why did this change occur?   ….Well, let me tell you…Because of a setback in the healthcare system. Despite the positive results of the co-management model, some national health authorities decided not to support this model, which is actually a brilliant, effective, and proven solution that resolves many current problems in the traditional healthcare system.

What urgent actions are needed to strengthen primary care in Peru?

•    First, the Integrated Health Insurance (SIS) program must enforce the law and resume transferring SIS funds to the CLAS as mandated by the CLAS law.  In this way, the CLAS-run primary care facilities would once again have the capacity for local spending decisions to improve efficiency and quality.

•    Second, the national, regional, and local governments must reorient their priorities toward financing and provision of technical, legal, and accounting support to primary care, expanding the CLAS model to more micro-networks of primary care facilities.

•    Third, local governments must have funds to transfer to the CLAS with which they sign co-management agreements, including a Results-Based Budget (PpR), a Municipal Incentive Plan, and/or other protected financial programs, to ensure that local governments transfer funds to CLAS to improve the quality and coverage of healthcare.

•    And fourth, we must promote training and regional exchanges among CLAS committees so that they can learn from one another and grow in their capabilities; they should organize a National Consortium of CLAS or a National Federation of CLAS—or whatever they wish to call it—so that they are interconnected and can strengthen one another.  The CLAS in the Regions of Arequipa, Tacna, and Moquegua—which have always had nearly 100% of their primary care facilities under the CLAS management model—should be the leaders of the national movement to strengthen this system nationwide.

CLAS is the best option for ensuring that the most vulnerable Peruvians have access to quality health services.

I will conclude by quoting a comment from Dr. Halfdan Mahler, former Director-General of the WHO, during his visit to Peru in 2006. Dr. Mahler visited several CLAS centers in different regions and later said: “CLAS is the closest thing to the Alma-Ata concepts that I have seen.”      For those who are not familiar with it, the Declaration of Alma-Ata is the international agreement to prioritize Primary Health Care, identifying the most critical components needed for services to be effective, equitable, and sustainable. The Declaration of Alma-Ata was signed by 100 countries in 1978, with Peru being one of the first signatories.

In the next podcast, we will discuss the topic of labor contracts and the salaries of healthcare workers employed in CLAS-run facilities.    Please send me your questions through the Platform for Health and Human Rights, which we thank for sponsoring this podcast.  If you enjoyed this podcast, please share it on your social media. 

THANK YOU VERY MUCH!!!!    

____________________________________________________________

For further reading on CLAS (some in English and Spanish versions):

Altobelli LC.  “Salud Comunitaria en el Perú ¿Como se esta Involucrando a la Comunidad?”   En:  Salud Centrada en las Personas. Perspectivas de la Sociedad Civil.  Lima: Universidad Peruana Cayetano Heredia, Fondo Editorial. Primera edición, mayo 2025. Pág. 63-80. https://altobelli.blog/wp-content/uploads/2025/12/salud-comunitaria-en-el-peru-pre-publicacion-del-libro-2025.pdf  https://altobelli.blog/wp-content/uploads/2025/12/altobelli.capitulo-salud-comunitaria.-en-salud-publica-centrada-en-las-personas.-upch-2025-3.pdf   

Altobelli LC. “Good Management Practice Is Correlated with Good Performance of Community-Engaged Primary Health Care Facilities in Peru.”  Glob Health Sci Pract. 2024;12(4).   https://doi.org/10.9745/GHSP-D-23-00402

Story WT , LeBan K, Altobelli LC, Gebrian B, Hossain J, Lewis J, Morrow M, Nielsen JN, Rosales A, Rubardt M, Shanklin D and Weiss J.  “Institutionalizing community-focused maternal, newborn, and child health strategies to strengthen health systems: A new framework for the Sustainable Development Goal era.”   Globalization and Health 2017;13:37    https://doi.org/10.1186/s12992-017-0259-z 

Altobelli LC, Paredes P, and Taylor CE.  “Peru: Communities and governments learning to work together.”  In: [edited by] Daniel C. Taylor & Carl E. Taylor; with the assistance of Laura Altobelli [and 17 others].  Just and Lasting Change: When Communities Own Their Futures.  2nd edition.  Baltimore: Johns Hopkins Univ. Press.  2016. https://www.researchgate.net/publication/319406493_Communities_and_Government_Learning_to_Work_Together_CLAS_in_Peru         

LeBan K, Story WT, Altobelli LC,  Gebrian B, Hossain J, Lewis J, Morrow M, Nielsen J, Rosales A, Rubardt M, Shanklin D and Weiss J.  “A global framework for integrating community-based maternal, newborn, and child health strategies into existing health systems: revaluing the role of international non-governmental organizations.”  Annals of Global Health.  2015;81(1):37–38.  https://dx.doi.org/10.1016/j.aogh.2015.02.596

Altobelli LC.  “Effectiveness in Primary Healthcare in Peru.”   In:  E. Beracochea (Ed.) Improving Aid Effectiveness in Global Health.  New York:  Springer Global Publishing.    2015.  https://doi.org/10.1007/978-1-4939-2721-0_12 https://www.researchgate.net/publication/266793303_Aid_Effectiveness_in_Peru_How_a_bottom-up_health_reform_model_strengthens_organizational_and_management_structures_to_effectively_utilize_national_and_donor_resources

Altobelli LC. “Future Generations.”  In: K. Hoffman (Ed.) The Role of Social Accountability in Improving Health Outcomes: Overview and Analysis of Selected International NGO Experiences to Advance the Field.   Washington, DC:  USAID/MCHIP.  2013. https://www.academia.edu/8180268/Overview_and_Analysis_of_Selected_International_NGO_Experiences_to_Advance_the_Field_The_Role_of_Social_Accountability_in_Improving_Health_Outcomes?email_work_card=title

Altobelli LC, Acosta-Saal C.   “Local Health Administration Committees (CLAS): opportunity and empowerment for equity in health in Peru.”   In:  Erik Blas, Johannes Sommerfeld and Anand Sivasankara Kurup (Ed.)   Social determinants approaches to public health: from concept to practice.   Geneva:  World Health Organization with support from the Alliance for Health Systems Policy and Research, WHO.  2011. Chapter 11, pp. 129-146.  https://apps.who.int/iris/handle/10665/44492  

Altobelli LC.  “Historia y Lecciones del Programa de Administración Compartida y las CLAS* en el Perú: Oportunidad y Empoderamiento para la Equidad en Salud.”  En:  

Social determinants approaches to public health: from concept to practice.   Geneva:  World Health Organization with support from the Alliance for Health Systems Policy and Research, WHO.  2011. Chapter 11, pp. 129-146.  Español.   https://altobelli.blog/wp-content/uploads/2025/12/altobelli.2008.historia-y-lecciones-de-clas-en-peru-oportunidad-y-empoderamiento-para-equidad-en-salud.pdf 

Altobelli LC, Sovero A,  Diaz R.  Costo-Eficiencia de CLAS. Lima:  Future Generations with support from DFID.  Data from Integrated Health Insurance (Seguro Integral de Salud -SIS, 2002).  2005.   https://altobelli.blog/wp-content/uploads/2025/12/altobelli-lsovero-adiaz-r-estudio-costo-eficiencia-clas-2005.pdf

Altobelli LC.  “Participación comunitaria en la salud: la experiencia peruana con CLAS.” En:  Politicas de Salud II – 2002-2006.   Lima, Peru:  Consorcio de Investigación Económico y Social / UK-DFID.   2002. https://www.researchgate.net/publication/351885704_Participacion_Comunitaria_en_Salud_la_experiencia_peruana_con_los_CLAS

Altobelli LC.  Participación de la sociedad civil en los servicios básicos de atención de salud en Venezuela y Perú.   En:  Vargas, H., Useche de Brill, I., Zapata, J. A., Altobelli, L. C., Vásquez, P., Díaz, J., Caldera Pietri, A., Solís, E., Volpi, V., Navarro, Z., Gómez Calcaño, L., Villanueva, M., Virtuoso, F. J., Correa López, A. M., Cavallieri, F., Griffith, J. D., Allegretti, M. H., Aguilar Valenzuela, R., Donoso, I., … Espeut, P..Programas sociales, pobreza y participación ciudadana. ISBN: 1-886938-75-X.  2000.  pp. 359-380.  https://doi.org/10.18235/0012407

Altobelli LC.  “Comparative Analysis of Primary Health Care Facilities with Participation of Civil Society in Venezuela and Peru”.  Prepared for the Inter-American Development Bank Annual Meeting of Governors Seminar on Social programs, poverty, and citizen participation.  Cartagena, Colombia, March 1998.   https://www.researchgate.net/publication/351885856_COMPARATIVE_ANALYSIS_OF_PRIMARY_HEALTH_CARE_FACILITIES_WITH_PARTICIPATION_OF_CIVIL_SOCIETY_IN_VENEZUELA_Y_PERU_Social_Programs_Poverty_and_Citizen_Participation

Altobelli LC, Pancorvo J.   The Shared Administration Program and Local Health Administration Committees: A Case Study from Peru. Case study prepared for the III Forum for Europe and the Americas on Health Sector Reform.   World Bank.  San José, Costa Rica, May 2000.  https://altobelli.blog/wp-content/uploads/2025/12/altobelli-y-pancorvo.-estudio-de-caso-sobre-clas-bm-conferencia-costarica.-mayo-2000.pdf

Altobelli LC.  Report on Health Reform, Community Participation, and Social Inclustion: the Shared Administration Program.  Report prepared for the mid-term evauation of technical cooperation UNICEF-Peru. August 1998.  DOI: 10.13140/RG.2.2.11739.48166  

Altobelli LC.  Informe de Salud, Reforma, Participación Comunitaria e Inclusión Social: El Programa de Administración Compartida y CLAS.  UNICEF.  Resumen Ejecutivo en Español de la Evaluación Intermedia de la Cooperación Técnica de UNICEF-Peru. Agosto 1998.  https://doi.org/10.13140/RG.2.2.36748.01926 

Leave a comment